Pound in focus as UK minister says fishing ‘matters hugely’ in Brexit deadlock

Tom Belger
·Finance and policy reporter
Updated ·2 min read
Chancellor of the Duchy of Lancaster, Michael Gove buys coffee from a cafe in Westminster, central London as ongoing talks to strike a post-Brexit trade deal take place this morning.
A campaigner against no-deal outside a Pret as cabinet office minister Michael Gove buys lunch. Photo: PA.

A UK minister has warned the EU that Britain will not be “tied to their way of doing things,” as the deadlock continues in Brexit trade talks.

But the pound edged higher on Tuesday, amid more positive noises from Ireland’s prime minister and a weakening dollar ahead of a public appearance by US Federal Reserve chair Jerome Powell.

Taoiseach Micheal Martin said he was “hopeful” an agreement could be reached by the end of the week. Only 30 days remain until the end of Britain’s transition period, with severe economic disruption if no deal is struck.

Sterling was up 0.4% against the dollar (GBPUSD=X) at close to $1.34, and up 0.1% against the euro (GBPEUR=X), hovering narrowly under €1.12.

The pound rose against the dollar in early trading on 1 December. Chart: Yahoo Finance UK
The pound rose against the dollar in early trading on 1 December. Chart: Yahoo Finance UK

UK cabinet office minister Michael Gove highlighted the continued obstacles to an agreement in an interview with Sky News on Tuesday, however.

Asked about the “sticking points,” he said: “The EU still want us to be tied to their way of doing things.”

He added that it was not “fair” that the EU wished to retain the right to impose “penal” restrictions in the event of a dispute.

Gove also highlighted the continued impasse over fishing, as he faced questions over the government’s priorities with only 12,000 workers in the industry.

WATCH: Michel Barnier says 'poisson' when asked about EU fishing rights

The minister said control over fishing rights “matters hugely,” highlighting the potential for the workforce to grow and for coastal waters to be managed in a “more environmentally sensitive way.”

“There’s no reason why we can’t be a country like Iceland and like Norway, which manage access to their own waters. It’s part of being an independent country.”

But Martin struck a positive tone on Tuesday, telling the Irish Times: "There is a landing zone for an agreement. It will require political will to conclude the deal and there are options to conclude the deal, and so on balance, I would be hopeful that it can be done at the end of this week.”

Michael Hewson, chief market analyst at CMC Markets UK, had noted on Monday: "The pound continues to hold up well ahead of what could be a key week for EU/UK trade talks, with the hope that a deal could be pushed through before the end of the week.

“It is being reported that the EU’s chief negotiator Michel Barnier is coming under pressure from the EU Commission to bring a deal back to Brussels sooner rather than later."

WATCH: Gove — EU needs to show flexibility in the trade negotiations